Income growth set to touch double digits

NEW DELHI: Per capita net national income in the country is set to expand at the fastest pace in five years in 2018-19, according to the first advance estimate of GDP unveiled by the government on Monday.

The data showed that per capita net national income is estimated to grow by 11.1% to Rs 1,25,397 in 2018-19 at current prices, faster than the 8.6% growth rate notched up in the previous year. At 2011-12 prices, it is expected to be at Rs 91,921, displaying a growth of 6.1% compared to the previous year.

Economists attributed the increase to a string of factors, including low inflation, expectations of a pick-up in overall growth as well as an increase in remittances. But they said the divergence in per capita among states was an issue that deserves attention. They also cautioned that since the estimates are provisional, it could also be revised downwards. In fiscal year 2013-14, the growth rate in net national income was 11.5% and in high growth years such as 2010-11 and 2011-12, the growth rate was 13.8% and 18.2% respectively. Economists also cautioned about drawing any concrete conclusions from the data.

“The good news is that the five year CAGR (FY15 to FY19) of nominal per capita income is 9.7%. However, the not so good news is the divergence in per capita income across states,” said Soumya Kanti Ghosh, group chief economic adviser at SBI.

Citing data for 18 states up to fiscal year 2017-18, he said seven states were above the national average and 11 below the national average. “Real per capita income CAGR grew by 6% during FY14 to FY18. States need to push policies in accordance with the emerging demographic dividends,” said Ghosh.

Some other economists said that sustained efforts are needed to catch up with the rest of the world in terms of per capita income, which is a measure of prosperity.